New Zealand is a target for money launderers. It is estimated that well over $ 1 billion a year from drug dealing and fraud is laundered through New Zealand businesses.
From 1 January 2019, Real Estate Agents in New Zealand are required to verify the identity of their vendors in accordance with Anti-Money Laundering legislation. This is called Customer Due Diligence (CDD). In some situations Real Estate Agents will also be required to verity the identity of purchasers.
If your Real Estate Agent cannot verify your identity in line with the legislation, they will not be able to act for you.
Identity verification can take days and sometimes weeks if a Trust or company is involved, or where parties reside overseas.
This means that Real Estate Agents are required to identify who their clients are (ie who they are acting for). This could be individuals, companies, Trusts, or other client types like societies and government departments. This means asking for information to verify your full name, date of birth and residential address. This can be done in several ways and they will ask to see identity documents like your Passport, Drivers Licence, utility bill etc. In some cases they have obligations to establish source of funds and wealth.
Real Estate Agents need to carry out Customer Due Diligence (CDD) on you even if you have been a long time customer.
What information will they need to get ?
As a starting point, the following indentiy information must be obtained
- the person(s) full name
- the person(s) date of birth
- if the person is not the client, person(s) relationship to the client
- any additional information prescribed by regulations
To make sure you are who you say you are, Real Estate Agents will need evidence of that information. To make the process as simple as possible for you, Real Estate Agents will use electronic verification – which is to confirm your identity using electronic databases wherever possible, so you don’t have to worry about getting copies of documents. RealEstate Agents will also ask for a photo of your Drivers Licence or Passport (there are other options which can discussed with you if you haven’t got one of these). To protect against ID theft, the agent will have to check that the photo on the document is you – the easiest way is for you to meet with the Real Estate Agent to confirm this.
Source of Funds / Wealth
In some cases Real Estate Agents will need to establish the source of the funds for the transaction (ie where the funds have actually come from) and source of wealth (ie how those funds got there in the first place and how was that money obtained).
Documentation you may be asked for
Below is a indication of some of the documents that Real Estate Agents may ask you to present in person or as certified documents as part of this process
Passport, NZ Firearms Licence or NZ Drivers Licence with another document such as a bank statement or statement issued by a Government Agency. You will need to provide a document with your residential address (ie a utility bill)
The Trust Deed, for trustees, and settlors, the information required for individuals as mentioned above, together with information regarding the Trust’s source of funds or wealth. Additional information may also be required for beneficiaries. Information regarding source of wealth may also be required.
Details of the company, together with the information for individuals mentioned above for every individual with more than 25% shareholding, all individuals with effective control of the company and all individuals acting on behalf of the company. Information regarding source of funds or wealth may also be required.
What happens if I don’t provide the information
If you are unable to provide the information the Real Estate Agents need, it is likely that the agent will not be able to provide services to you.
If you have any queries or concerns about these new requirements, please don’t hesitate to contact Matt Wineera
Major change for the Real Estate Industry
This is a major change for the Real Estate Industry and we understand that some of these questions may seem intrusive, however, all Real Estate Agents in New Zealand have legal obligations to comply with the AML/CFT (Anti Money Laundering / Countering Financing of Terrorism) legislation and will be requesting more documents and information than they have in the past. Real Estate businesses are not doing this because they think you are laundering money – they are doing it, not only because it’s the law, but to help put an end to the over $ 1 billion that is laundered through New Zealand every year.
Do you have a question on the new AML legislation, on the local Real Estate market, or should you spend money on your home before you sell, just call Matt Wineera on 0274 951 536 who is always on hand to answer your query.
Work with Matt Wineera who lists and sells in the Tauranga, Mount Maunganui and Papamoa areas.